サステナビリティ | 26 min VIDEO | December 2023

ESG360 - The EU’s Social Taxonomy, Climate Risks and ESG in Ukraine

We discuss recent developments in the EU's social taxonomy, how financial firms are managing climate risk and touch upon the ESG implications in Ukraine

The EU backed platform on sustainable finance published its final report on extending the EU taxonomy or classification to include social issues, encouraging new investment in socially beneficial enterprises.
Banks need to start incorporating climate considerations for all the traditional risk types including market, credit, liquidity, and operational as well as evaluate physical/location risk.
ESG concerns in Ukraine span across social issues including the humanitarian crisis, regional stability and government effectiveness to environmental risks from spikes in radiation and polluted water supplies.

In this episode of ESG360, we discuss the EU’s social taxonomy with Ella Chalfon, a managing director in Nomura’s Sustainable Finance team. The taxonomy gives the EU an opportunity to be a leader in determining what ‘good’ looks like on social issues while encouraging new investment in socially beneficial enterprises. It also provides a yardstick for investors to benchmark companies and hold them accountable on their social credentials.

Victoria Collins, Nomura’s Head of Climate Risk, talks about how financial firms are managing climate risks arising from extreme weather like the $1.5 billion in damage caused by recent deadly flooding in Australia and how they are treating so-called stranded assets like coal-fired power stations when demand plummets. We also touch on the ESG implications in Ukraine, including how investors with a social mandate can address the unfolding humanitarian crisis, and the escalating risks from political instability and a change in country ratings.